Expenditures for improvements and repairs to the nation’s owner-occupied housing stock are expected to grow throughout 2022 and into early next year, but at a decelerating pace, according to the Leading Indicator Remodeling Activity (LIRA), a quarterly outlook of home improvement and repair spending.
The latest LIRA, released by Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University, projects that year-over-year increases in residential renovation and maintenance spending will peak at 19.7 percent in the third quarter of this year before sliding to 15.1 percent in the first quarter of 2023.
“Massive increases in house price appreciation and the resulting levels of tappable home equity will continue to support remodeling activity this year and into next,” said Carlos Martín, project director of the Remodeling Futures Program at the Joint Center.
“Many other market indicators, including existing home sales, renovation permitting and retail sales of building materials, also continue to grow at high, albeit slowing, rates,” he added.
According to Abbe Will, associate project director of the Remodeling Futures Program, the level of annual expenditures for home improvements and repairs is set to expand to nearly $450 billion by the first quarter of 2023.
“Yet, the rising costs of project financing, construction materials, and labor, as well as growing concerns about a broader economic slowdown or recession may further slow remodeling growth,” Will observed.